Tuesday, November 29, 2011

NCUA Sues Wachovia over the Failures of U.S. Central and WesCorp

The National Credit Union Administration (NCUA) has filed suit in Federal District Court in Kansas against Wachovia and its subsidiaries.

NCUA’s complaint alleges that there were numerous material misrepresentations made by the sellers, issuers and underwriters in the offering documents of securities sold to two failed corporate credit unions -- U.S. Central and WesCorp. These misrepresentations caused the corporate credit unions that bought the securities to believe the risk of loss associated with the investment was minimal, when in fact the risk was substantial.

Read the press release.

Read the complaint.
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1 comment:

  1. AnonymousNovember 29, 2011 at 4:41 PM

    To be sure let's look at the facts. The NCUA held examiners on site at both USCentral & WesCorp FCU 24x7. The NCUA examiners attended board meetings, ALCO meetings and maintained engagement with the investment decision makers and other key players. If these folks took the time to look beyond the triple A ratings page and actually drilled down to the FICO scores, loan to value (ltv)and debt ratios in each pool they would never have purchased the toxic waste. Fact is these folks took a short cut. They relied on the triple A ratings went in the deep end of toxic waste and made wild and crazy bets with other peoples' money. And when it was all over WesCorp's CEO Bob Siravo got a $6Million SERP out of the deal. As for the NCUA examiners - they are still, federal government, civil servant NCUA examiners with filthy stinking rich health and pension benefits. And there you have it, sub-prime, interest only, pick-a-payment, as stated income on teaser rate 125% loan to value mortgages. Loans the credit union would never fund directly the Corporate Credit Unions bought in bulk. Greed pure and simple. When more is not enough. And the NCUA assessments carry foward as the NCUA examiners responsible continue to get paid.

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